Government Contracts Monitor

Some Is Better Than None: Even A Partial Win May Get You A Piece Of Your Fees

July 13, 2015

The recent decision, J.M. Carranza Trucking Co. v. United States Postal Service, PSBCA Nos. 6354, 6367, 6373, 6421 and 6422 (June. 3, 2015), reminds us that even if a contractor does not win on every argument, it can still recover attorney fees and expenses for the portion of its dispute upon which it does prevail. It also serves as a reminder that it is important to keep detailed records that specify exactly how attorney time and expenses were incurred.

The case arose when J.M. Carranza Trucking Co. (Carranza) – a company that filed and litigated five appeals against the U.S. Postal Service – applied for attorney fees for all five appeals under the Equal Access to Justice Act (EAJA). The Postal Service challenged Carranza’s fee application, arguing in part that the company had only prevailed on three of its five appeals. The Postal Service Board of Contract Appeals (PSBCA) disagreed.

While PSBCA did not award all of Carranza’s fees, its determination of the amount of Carranza’s award did not hinge on the number of appeals Carranza had won. Rather, first, PSBCA found that although five appeals were docketed, the litigation centered on three basic issues. Second, PSBCA noted that Carranza had prevailed on one of those three issues. Third, PSBCA held that the parties spent approximately one third of their time on this issue in the litigation of the five appeals overall. And finally, PSBCA found that the Postal Service “was not substantially justified in its position” on this issue. Accordingly, awarded Carranza one third of the amount sought in its EAJA application.

Carranza Trucking also reinforces the risks of block billing for government contractors litigating against the U.S. Government. Block billing is where an attorney bills time spent on multiple tasks in a single, large increment with little or no description of the specific tasks performed and/or the time devoted to each task. The Carranza Trucking apportionment is decided by the Board’s approximation that one-third of the time was devoted to the issue on which Carranza prevailed, but notes that Carranza did not break down its fee request by issue. As a result, if Carranza’s attorneys spent most of their time working on the one issue on which Carranza prevailed, PSBCA had no way of knowing it. In other words, the award of one-third of its attorney fees may have deprived Carranza of some of the fees to which it was entitled.

A clearly itemized billing statement would have allowed PSBCA to award attorney fees based on the time actually spent on the specific issue. To ensure a full recovery of fees related to a specific issue on which a contractor prevails, contractors should direct their counsel to generate itemized statements identifying specific tasks and the amount of time spent on each task and submit fee applications that reflect this level of granularity.